This is a case that turned on considerations of judicial economy, which Judge Love noted the Federal Circuit has referred to as being a "paramount consideration when determining whether a transfer is in the interest of justice" (quoting In re Volkswagen of Am., Inc., 566 F.3d 1349, 1351 (Fed. Cir. 2009). (Ed. note - Judge Love refers to this case as Volkswagen II to distinguish it from the Fifth Circuit's widely-cited 2008 decision which he laters references in his discussion of the various Federal Circuit opinions on venue. Readers of my blog and seminar attendees may note I often refer to this decision as VW IV since the Fifth Circuit has actually had two VW cases, in 2004 and 2008 (the latter of which spawned two panel decisions and a an en banc decision, referred to respectively as IIa, IIb, and IIc) and there was a 2008 Federal Circuit VW mandamus case denying the writ (VW III) - which was a precursor to the 2009 decision which similarly denied the writ in the same litigation. All clear?)

Back to the facts. In this case there had been a prior patent infringement action filed by the plaintiff in the Southern District of Texas (including issuance of a Markman ruling, a bench trial, and findings and conclusions), which was also the plaintiff's home forum. Although the current suit involved two patents not involved in the previous suit "[e]ven a cursory review of the two new patents, however, demonstrates that the patents are overwhelmingly similar. Given that the Southern District of Texas is intimately familiar with the technology at issue, the patents-in-suit and one of the parties, this factor weighs heavily in favor of transfer."

Accordingly, Judge Love concluded that while the defendant had not carried its burden to show that the District of Colorado was "clearly more convenient", it had with respect to the Southern District of Texas, and accordingly ordered the case transferred to that court.

I just saw the tragic news that Greg Coleman died in a plane crash last night in Florida. For readers that didn't know Greg, he was a partner in YetterColeman in Austin and prior to his service as Texas' first solicitor general (he was the first when then-Attorney General John Cornyn created the position in 1999) he clerked for Judge Edith Jones on the Fifth Circuit and Justice Clarence Thomas at the U.S. Supreme Court. Greg's practice involved a lot of appearances at the Supreme Court, the most recent of which was on October 13 when he argued on behalf of a Texas district attorney in a DNA evidence case in Skinner v. Switzer. As the article above notes, he was immensely respected in Texas legal circles, and to paraphrase an observation from a 1919 obituary in the Marshall paper that I have never forgotten, he is the kind of person whose loss the community feels.

I had the privilege of working with Greg on the O'Connor's Federal Rules * Civil Trials for several years when he was also updating chapters, although we didn't actually meet face to face till sometime later when he and I were on the editorial board for the Litigation Section's Advocate publication that I frequently post about, and I got a chance to benefit from his observations firsthand. I treasured our time together on the back cover of O'Connor's because I always hoped that people might think I was smarter than I actually am because my picture was next to his, and everybody knew how brilliant Greg was.

Our prayers go out to Greg's family in this sad time. We will miss him.

"We're trying to get a handle on how we're going to proceed with theses cases" Judge Ward told the attorneys in his court repeatedly during the day as he and Judge Everingham conducted status conferences on their first sixteen "false marking" cases today, hearing argument on all pending motions as they went along, and assigning trial dates. As readers know, there have been over 500 such cases filed in 2010 since the Federal Circuit's Bon Tool opinion last December gave new life to the cause of action in 35 USC 292, and about 40% have been filed in the Eastern District of Texas. As I've noted previously, our firm represents a number of defendants in these cases, so it was an interesting day taking notes as to how the judges will handle these cases going forward, and seeing how the commonly raised issues in these cases fared with two experienced trial judges.

As I posted earlier today, it took Judge Ward just under fifteen minutes to address the common issues in false marking cases pending in his court by ruling on the pending motions in the first three status conferences, and setting all of them for speedy trials - in almost every case trial settings in the middle of next year which were agreed to by the plaintiff and defendants (I think two defendants wanted later settings, but the rest agreed). Later conferences fleshed out these issues somewhat, and gave attendees a solid idea of how the false marking docket in Marshall will be handled, as well as identifying some interesting "wrinkles" that some cases present, and showing how the Court will handle those (the short answer seems to be that "wrinkles" get an extra 60-90 days to get ready for trial):

Motion to dismiss for failure to plead with sufficient specificity - all of these were denied because the judges believe that FRCP 8 applies, and the pleadings were sufficient under that standard. In later written orders Judge Ward provided cites to the orders that he believed correctly stated the test, but he stated repeatedly at the conferences that all these rulings were subject to further guidance from the Federal Circuit. Thus if the pending proceeding identified at one of the hearings results in a Fed Circuit holding that a higher pleading standard is appropriate, those motions can be reurged, although the plaintiffs will have an opportunity to replead to try to meet the new standard.

Motions to transfer - four of the sixteen cases had motions to transfer argued (a fifth had a motion filed last week but briefing wasn't concluded) and Judge Ward and Judge Everingham granted one of these each in the morning, both in cases where there was one defendant, and the only witnesses identified other than the plaintiff's rep in Houston were in or very near the transferee forum. The other two were a motion to sever and transfer by a single defendant in one case and a second motion which was filed by all defendants in a case where the product packaging and marking was made and applied to the product in the Eastern District of Texas and there was a factual dispute where the marking decisions were made - Northern District of Texas or Wisconsin. In both those cases, the judges took the motions under advisement since these presented less straightforward applications of 1404. Predictably, the granting of the first two motions resulted in four additional defendants in hearings after lunch telling the judges they'd be filing motions now, and those will be briefed and ruled on in the ordinary course. But as for now, plaintiffs are 0-2 on venue rulings, with two pending, one being briefed, and four more being drafted as a result of the courts' granting of the two.

Trial settings - Judge Ward set all of the "routine" false marking cases for trial in June of 2011, with cases presenting special situations getting August and in one case September settings. Judge Everingham set most cases for July 2012 with a few in August. Parties were generally given 14 days to prepare and submit scheduling and discovery orders in line with the Court's usual practices. Trial would be on the liability issue (primarily intent to deceive), with the Court to set damages.

Complications - what became increasingly apparent as the day wore on is that while most false marking cases are simple "expired patent" cases (as the attached chart from Docket Navigator and Gray on Claims earlier this year shows) where the primary issue will be whether there was intent to deceive, several cases presented complications, which got the cases an extra couple of months before trial. Here are some examples.

Inequitable conduct - two cases presented the issue of whether a finding that a patent is unenforceable makes marking with that patent "false marking" under the statute. Interestingly, according to the chart above, only one percent of false marking cases deal with unenforceability issues - apparently both in the Eastern District's 200 such cases were heard today, so we can expect a ruling from one of the judges on this issue. The second case added the additional twist that there had not been a final judgment of unenforceability, so whether the factual record developed in a prior case was sufficient to prove up unenforceability for purposes of asserting that in a false marking case - assuming that you can assert is as a ground for false marking - was also going to be an issue. That got the case an extra two months from the ordinary case, since the judge will first have to make a finding as to whether there was in fact inequitable conduct.

Parallel cases - what if there are two false marking cases against the same products? The judge made clear that there won't be a double recovery, but declined to dismiss the Marshall case at this time the case in favor of a somewhat overlapping marking case proceeding elsewhere.

Scope of patent/Markman hearing, anyone? - there was one case that was not an "expired patent" case but rather raised questions of whether a patent covered the products. The parties appeared to agree that the case would not require a claims construction (all cheered at this) and that the jury could simply decide the threshold question of whether the marked patent covered the product in the first place, then decide intent.

It took Judge Ward just under fifteen minutes to address the common issues in false marking cases pending in his court by ruling on the pending motions in the first three status conferences. Generally speaking, the rulings are these:

Motion to dismiss seeking more definite statement were denied - pending further guidance from the Federal Circuit, the Court believes that FRCP 8 applies, and the pleadings were sufficient under that standard.

Motions to transfer filed by the defendant in the one of the three in which it was filed (a single-defendant case) was granted from the bench (as I write this, patent lawyers are literally scattering across the Marshall square in search of computers, typewriters, and even Putt-Putt penciles to file motions to transfer where they were not already). There were no motions to transfer in the multi-defendant case, or in the other single-defendant case, as tas the ruling was from the bench, no written order at the moment.

Cases were set for jury selection June 6, 2012 - plaintiff and defendant alike agreed that discovery could be conducted in time for this trial date, which is about the norm for non-patent cases in Marshall. Parties were given 14 days to prepare and submit scheduling and discovery orders in line with the Court's usual practices. Trial would be on the liability issue, with the Court to set damages.

The nice thing about being acxross the street is that I can walk over and write this post, then head back for the next round of cases at 10:00.

The first batch of false marking cases filed in the Eastern District of Texas officially makes it to status conferences today, with over a dozen set for status conferences and motion hearings throughout the day in Judge T. John Ward's court. I'm aware of one case that's previously had a scheduling conference in Judge Ron Clark's court, but the cases set for status conferences in Tyler to date have settled prior to the hearings, and these are the first in Marshall.

I am late getting this notice out, but our new offices at 111 East Austin Street are now complete, and today will be a sort of soft-open house as we host visiting lawyers in for the hearings. Our firm is representing several defendants in these marking cases, so we'll be attending the proceedings during the day, but if you're in town feel free to stop by for a cup of coffee and a quick tour of the offices, which include our firm's core offices on the east side and the trial suite on the west side.

The State Bar of Texas Litigation Section annually awards grants to deserving groups and organizations - information on the grants and past recipients can be found here. If readers know of any deserving applicants, please suggest that they look at the application information there. To see the sorts of groups that have received funding recently, here's a list of last year's grant recipients:

Advocacy, Inc. (Austin)$3,000 in support of a program to represent Medicaid beneficiaries under the age of 21 who are challenging denials of medically necessary healthcare and treatment. The grant will pay for travel expenses to allow staff to represent clients in-person at fair hearings on the challenges.

CASA of Harrison County (Marshall)$2,400 in support of the expansion of CASA into Marion County to provide trained, court-appointed volunteers to serve as advocates for the best interest of abused and neglected children.

Mosaic Family Services (Dallas)$3,500 to support their Multicultural Legal Services Program which provides direct legal services to low income immigrant victims of domestic violence and human trafficking.

Human Rights Initiative of N. Texas (Dallas)$3,500 for legal assistant to help immigrant women and children who are victims of human rights abuses apply for immigration relief and legalize their status.

Texas Rio Grande Legal Aid (El Paso)$3,900 to support TRLA¡¦s Community Justice Program in El Paso, a joint project with the El Paso County Bar Association to improve access to legal services for the poor. The funds will be used to purchase equipment for a portable office to use at bi-monthly divorce clinics.

Texas Appleseed (Austin)$2,500 to train immigration judges, federal government attorneys and immigration attorneys on issues related to mental disability and the immigration process in order to provide better safeguards for immigrants whose mental disabilities diminish their capacity to participate in removal proceedings.

Central Dallas Ministries (Dallas)$3,500 to support the Legal Action Works Program, which provides legal services for low-income women including assistance in obtaining protective orders and divorce and child custody representation.

It always seems to come as a surprise to people that the actual facts of a case affect a court's ruling on motions - even common ones.

In this case defendants sought to stay this case pending reexam. The Court denied their motion. Some time later they then refiled their motion, asserting that the facts had changed since the Court's initial denial - and Judge Davis agreed. "Southwire’s claim amendments and responses during the ’301 patent’s reexamination strongly weigh in favor of staying this litigation. On May 4, 2010, the PTO issued an Initial Office Action rejecting all of the ’301 patent’s claims in Cerro Wire’s ex parte reexamination. In response, Southwire did not attempt to distinguish the prior art over the original claims; instead, it amended all of the independent claims and added three new claims."

Did this matter? Well, yes. "Reexamination is not necessarily such an extraordinary circumstance that justifies a stay, and the Court previously denied a stay in this case. However, the specific facts here tip the scales in favor of a stay: Southwire substantively amended the independent claims of the patent-in-suit toavoid the prior art cited in the reexamination, Southwire has made inconsistent representations regarding the validity of the asserted claims, the Court has not yet construed the claims, and the PTO’s rejection of the parent patent has proceeded to the appeal stage of the reexamination proceedings. Standing alone, these factors do not merit a stay pending reexamination; but in combination they do."

Lt. General Frederick "Boy" Browning: I've just been on to Monty. He's very proud and pleased.Major General Urquhart: Pleased?Lt. General Frederick "Boy" Browning: Of course. He thinks Market Garden was 90% successful.Major General Urquhart: But what do you think?Lt. General Frederick "Boy" Browning: Well, as you know, I always felt we tried to go a bridge too far.

This case was tried before a jury January 9, 2009 through January 29, 2009, resulting in a verdict in favor of Defendant B-Tek Scales, LLC on infringement of all three of the asserted patents, and and for the defendant on invalidity as to two of the three patents.

Following the jury trial in this case, the defendant, inspired no doubt by Gen. Montgomery's campaign to take the bridges across the Rhine in Operation Market Garden (from which came the Cornelius Ryan book from which we derive the colloqial term A Bridge Too Far) launched Operation Inequitable Conduct Garden (at least that's what I think they called it), seeking a judicial finding that the patents that it didn't infringe and which were invalid anyway (two of the three) were also unenforceable due to inequitable conduct.

Judge Giblin accordingly conducted a bench trial on the issue of inequitable conduct, after which he concluded that the defendants had failed to establish by clear and convincing evidence an intent to deceive sufficient for a finding of inequitable conduct. "While [defendant] need not point to a 'smoking gun' to prevail, because inequitable conduct may be inferred from circumstantial evidence," the Court wrote, "the inference must 'be the single most reasonable inference able to be drawn from the evidence.'" In this case, Judge Giblin found the prosecuting attorney credible as a witness, and that the evidence presented was open to more than one interpretation."

Last week I posted on Judge Davis' order noting that redactions of trial transcripts were to be for personal identifiers, and should not be used to wholesale redact technical or or previously confidential information. That order was actually preceded by an order by Federal Circuit Chief Judge Randall Rader sitting as a district judge in his Eastern District case, IP Innovation v. Red Hat. In an order issued September 21, Judge Rader rejected the defendant's attempt to redact references to Xerox' license agreements to the patents in suit, noting that no request to close the courtroom was made during trial and that "the public should have access to the contested portions of the trial transcript and the admitted trial exhibits. In recent years, the U.S. Court of Appeals for the Federal Circuit has expressed increased interest in patent damages methodologies and the probative value of prior license agreements. The trial testimony in this case highlighted the parties’ differing damages methodologies and treatments of prior license agreements to the patents-in-suit. Public access to such testimony provides the public with a more complete understanding of the damages methodology in this patent infringement case. This court’s rulings on damages issues and its discussions with the damages experts regarding the license agreements may also be relevant to future litigants in preparing their damages cases."

Instantly rendering my recent venue paper incomplete is Judge Everingham's opinion last week granting a motion to transfer where he found that the private and public factors favored transfer, and that the Plaintiff's location in the district didn't counsel a different result. He noted that the plaintiff allegedly moved its office to a residential apartment complex in Frisco (which is in the Eastern District) less than three weeks before this suit was filed, thus although the plaintiff did have a long term presence in Texas, its presence in the district "appears to be recent, ephemeral, and an artifact of litigation." In this case one defendant's headquarters was located in the Northern District of California, and the "vast majority" of the other defendant's witnesses and evidence were located in Oregon, thus the transferee district was clearly more convenient.